2001 Miraflores LP (LINC - DC&TC) - Regulatory Agrmt & Declaration of CC&RsSTEWART TITLE CO.
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:)
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, California 92253
Attention: Executive Director
DOC N 2001—OZS°SSI
01/26/2901 06:00R Fee:NC
Page 1 of 32
Recorded in Official Records
County of Riverside
Gary L. Orso
Assessor, County Clerk & Recorder
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(Exempt from Recordation Fee per Gov. Code § 6103)
REGULATORY AGREEMENT AND
DECLARATION OF COVENANTS, CONDITIONS, AND RESTRICTIONS
FOR PROPERTY
THIS REGULATORY AGREEMENT AND DECLARATION OF COVENANTS,
CONDITIONS, AND RESTRICTIONS FOR PROPERTY (the "Agreement') is made as of
December 20, 2000 , by and between DC & TC, LLC, a California limited liability
company (the "Participant') and the LA QUINTA REDEVELOPMENT AGENCY, a public
body, corporate and politic (the "Agency" or "Agency" or "Beneficiary").
RECITALS
A. Participant is fee owner of record of that certain real property (the "Property" or
the "Site") located in the City of La Quinta, County of Riverside, State of California legally
described in the attached Exhibit "A", which Property Participant acquired from Agency
pursuant to a Grant Deed recorded concurrently herewith. Also recorded herewith was a Deed of
Trust securing repayment by Developer of that certain promissory note in favor the Agency.
B. This Agreement and the Grant Deed described in Recital A are part of a
redevelopment project described in that certain Affordable Housing Agreement, dated
December 20 , 2000, by and between Participant and Agency. As described in the
Affordable Housing Agreement, the Property shall be developed by Developer with a 118-unit
apartment complex for senior citizens to be operated in accordance with the Affordable housing
Agreement and this Agreement.
C. The Property is within the La Quinta Project Area (the "Project') in the City of La
Quinta and is subject to the provisions of the "Redevelopment Plan" for the Project.
D. The Community Redevelopment Law (California Health and Safety Code 33000
et seq.) provides that a redevelopment agency shall establish covenants running with the land in
furtherance of redevelopment plans.
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NOW, THEREFORE, the Participant and Agency declare, covenant and agree, by and for
themselves, their heirs, executors, administrators and assigns, and all persons claiming under or
through them, that the Site shall be held, transferred, encumbered, used, sold, conveyed, leased
and occupied, subject to the covenants and restrictions hereinafter set forth, all of which are
established expressly and exclusively for the use and benefit of the Agency, the citizens of the
City of La Quinta, and every person renting a dwelling unit on the Site.
1.0 DEFINITIONS.
1.1 Riverside County Median Income. For purposes of this Agreement, the
"Riverside County Median Income" shall be determined by reference to the regulations
published by the California Department of Housing and Community Development pursuant to
Health and Safety Code Section 50093, or its successor.
1.2 Senior Citizen. For purposes of this Agreement, the term "Senior Citizen" shall
mean the person, persons, or family that is/are an Eligible Tenant of a unit; provided however,
that:
1.2.1 At least one member of the household residing permanently in the unit
shall be sixty-two (62) years of age or older, and (ii) all other persons residing permanently in the
household shall be a spouse, cohabitant, member of the immediate family, or person providing
primary physical or economic support to the person who is sixty-two (62) years of age or older.
The only other resident permitted in the same dwelling unit is a "Permitted Health Care
Resident" (as that term is defined in California Civil Code Section 51.3) shall be permitted to
occupy any dwelling unit during any period that such person is actually providing live-in, long-
term, or hospice health care to a Senior Citizen occupant for compensation.
1.2.2 Temporary guests of a Senior Citizen shall be allowed for a maximum
cumulative total of not more than sixty (60) days in any twelve (12) month period.
1.2.3 The Project is not available to "Qualified Permanent Residents" (as
defined in California Civil Code Section 51.3) because there is no ownership interest in the Unit
nor any expectation of an ownership interest.
1.3 Units. As used in this Agreement, the term "Units" shall mean the 118 rental
apartment units for Senior Citizens to be developed on the Site. The term "Unit" shall mean one
of the Units.
1.4 Affordable Units. As used in this Agreement, the term "Affordable Units" shall
mean that portion of the 118 Units which shall be made available to, rented by, and occupied by
Eligible Tenants". All of the units except for the manager's unit are Affordable Units. The term
"Affordable Unit" shall mean one of the Affordable Units. An Affordable Unit shall not be used
for the Manager Unit described in Section 2.6.
1.5 Moderate Income Senior Citizen Tenant. As used in this Agreement, the term
"Moderate Income Senior Citizen Tenant" shall mean those Senior Citizens whose household
income does not exceed one hundred twenty percent (120%) of the Riverside County Median
Income. IIIIIII IIIIIII II IIIIIII IIII IIIIIII IIIII III IIIII IlIIII IIII 01 26 29 f5381 GOA
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1.6 Lower Income Senior Citizen Tenant. As used in this Agreement, the term
"Lower Income Senior Citizen Tenant" shall mean those Senior Citizens whose household
income does not exceed eighty percent (80%) of the Riverside County Median Income.
1.7 Very Low Income Senior Citizen Tenant. As used in this Agreement, the term
"Very Low Income Senior Citizen Tenant" shall mean those Senior Citizens whose household
income does not exceed fifty percent (50%) of the Riverside County Median Income.
1.8 Eligible Tenant. As used in this Agreement, the term "Eligible Tenant" shall refer
to a Moderate Income Senior Citizen Tenant.
1.9 Affordable Rent. As used in this Agreement, the term "Affordable Rent" shall
mean annual rentals whose amount does not exceed the maximum percentage of income that can
set by California law for two persons living in a one -
be devoted to rent by an Eligible Tenant, as
m M bedroom unit and three persons living in a two -bedroom unit.
1.10 Tax Credit Regulatory Agreement. As used in this Agreement, the term "Tax
N Credit Regulatory Agreement" shall mean that agreement between the Developer or Developer's
successor in interest and the State of California Tax CreditAllocation Committee ("TCAC")
governing the allocation of Federal or State Low Income Housing Tax Credits to the Property as
required under section 10337 (a) of California Code of Regulations, Title 4, Division 17, Chapter
�. 1 as amended.
C 2.0 RESIDENTIAL RENTAL PROPERTY.
Participant hereby agrees that the Project is to be owned, managed, and operated, for a
term equal to fifty-five (55) years, commencing upon the date of the recordation a one hundred eighteen
Release
of Construction Covenants for the Site in accordance with the AHA,
(118) unit rental apartment project for Senior Citizens (other than the Manager Unit described in
Eligible
Section 2.6) made available to, rented by, and occupied by ible Tenants. To that end, and for
the term of this Agreement, the Participant hereby represents, covenants, warrants and agrees as
follows:
2.1 Development of the Site. Participant shall develop the Site with the senior
apartments project thereon in accordance with the Agency Agreements, including the Schedule
of Performance set forth in the AHA, for the purpose of providing housing for Senior Citizens
anager Unit) made available to, rented by, and occupied
with all of the Units (except one [1] M
by Eligible Tenants. Participant shall own, manage, and operate the Project as a project to
provide senior citizen rental housing comprised of a building(s) together with functionally
related and subordinate facilities.
2.2 Facilities. All of the dwelling units in the Project shall contain facilities for
living, sleeping, eating, cooking and sanitation in accordance with the this Agreement, the AHA,
the Agency Agreements, applicable laws and regulations, and all of the permits and approvals for
the Project, whichever of the foregoing is the more restrictive.
2.3 Residential Use. None of the dwelling units in the Project will at any time be
utilized on a transient basis or will ever be used as a hotel, motel, dormitory, fraternity house,
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sorority house, rooming house, nursing home, hospital, sanitarium, or trailer court or park, day
care center, or non-residential uses (except permitted home occupations) without the Agency's
prior written consent which consent may be given or withheld in its sole and absolute discretion.
2.4 Conversion of Units. No part of the Project shall at any time be owned by a
cooperative housing corporation, nor shall the Participant take any steps in connection with the
conversion to such ownership or uses to condominiums, or to any other form of ownership,
without the prior written approval of Agency which approval may be given or withheld in its sole
and absolute discretion.
2.5 Preference to Senior Citizens. All of the dwelling units will be available for
rental in accordance with the terms of this Agreement, and the Participant shall not give
preference to any particular class or group in renting the dwelling units in the Project, except to
the extent that the dwelling units are required to be leased or rented to Senior Citizens (other than
the Manager Unit described in Section 2.6) who are Eligible Tenants.
2.6 Resident Manager and Staff Units. One, and only one, Unit in the Project shall be
occupied by a resident on -site manager (the "Manager"). The "Manager Unit" shall not be one
of the Affordable Units nor shall be required to be rented to a Senior Citizen.
2.7 Liability of Participant. Participant and Manager shall not incur any liability
under this Agreement as a result of fraud or intentional misrepresentation by a tenant.
3. OCCUPANCY OF PROJECT
Participant hereby represents, warrants, and covenants as follows:
3.1 Occupancy Levels. Except as expressly provided herein, throughout the term of
this Agreement, all of the Units (excluding the Manager Unit) shall be continuously occupied or
held vacant and available for occupancy by Senior Citizens who are Eligible Tenants.
3.2 Rental Rates; Occupancy Levels. Participant hereby agrees to and shall rent the
Affordable Units at no greater than Affordable Rent. Participant further agrees that no more than
two (2) persons shall occupy each one -bedroom unit and no more than four persons shall occupy
each two bedroom unit.
3.3 Targeted Households. Sixty percent (60%) of the Affordable Units shall be rented
to Very Low Income Senior Citizen Tenants, eighty percent (80%) (inclusive of the sixty percent
(60%) rented to Very Low Income Senior Citizen Tenants) of the Affordable Units shall be
rented to Lower Income Senior Citizen Tenants, and one hundred percent (100%) (inclusive of
the eighty percent (80%) rented to Lower Income Senior Citizen Tenants) of the Affordable
Units shall be rented to Moderate Income Senior Citizen Tenants.
3.4 Occupancy By Eligible Tenant. A unit occupied by an Eligible Tenant who
qualified as such at the commencement of the occupancy, shall be treated as occupied by an
Eligible Tenant at such income level until a recertification of such Eligible Tenant's income in
accordance with Section 3.8 below demonstrates that such tenant no longer qualifies as an
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Eligible Tenant. A Unit previously occupied by an Eligible Tenant and then vacated shall be
considered occupied by an Eligible Tenant until the Unit is reoccupied.
3.5 Income Computation Certificate. Immediately prior to an Eligible Tenant's
occupancy of an Affordable Unit, Participant shall obtain and maintain on file an Income
Computation and Certification form (which form shall be approved in advance by the Agency
Executive Director) from each such Eligible Tenant dated immediately prior to the date of initial
occupancy by such Eligible Tenant. In addition, Participant shall provide such further
information as may be required in the future by the Agency. Participant shall use its best efforts
to verify that the income provided by an applicant is accurate by taking the following steps as a
part of the verification process: (i) obtain three (3) pay stubs for the most recent pay periods; (ii)
obtain a written verification of income and employment from applicant's current employer; (iii)
obtain an income verification form from the Social Security Administration and/or California
Department of Social Services if the applicant receives assistance from either agency; (iv) if an
applicant is unemployed or did not file a tax return for the previous calendar year, obtain other
verification of such applicant's income as is satisfactory to the Agency; or (v) such other
information as may be reasonably requested by the Agency. A copy of each such Income
Computation and Certification shall be filed with the Agency prior to the occupancy of a unit by
an Eligible Tenant whenever possible, but in no event more than thirty (30) days after initial
occupancy by said tenant. Notwithstanding the above, during the period of effectiveness of the
Tax Credit Regulatory Agreement applicable to the Site, Participant shall be permitted to comply
with this Section 3.4 by complying with the income computation procedures set forth in the Tax
Credit Regulatory Agreement.
3.6 Rental Priority. During the term of this Agreement, Participant shall use its best
efforts to lease vacant Affordable Units to credit -worthy Eligible Tenants first to displaced
persons entitled to a preference pursuant to California Health and Safety Code Section 33411.3
or successor statute who qualify as Eligible Tenants and who meet the other eligibility
requirements of this Agreement; and second to other Senior Citizens who qualify as Eligible
Tenants and who meet the other eligibility requirements of this Agreement. Participant shall,
and Agency may, maintain a list (the "Housing List") of Senior Citizens who have notified
Participant and/or Agency of their desire to rent a unit in the Project, and Participant shall
contact individuals on such Housing List and then determine eligibility. Should multiple tenants
be equally eligible and qualified to rent an Affordable Unit, Participant shall rent available
Affordable Units to Eligible Tenants on a first -come, first -served basis.
3.7 Recertification. As long as the Tax Credit Regulatory Agreement is in effect,
Participant shall be deemed to satisfy the recertification requirements of this Section by
submitting a copy of the TCAC recertification documents to Agency as long as the TCAC
recertification documents require the same information as this Section. Upon termination of the
Tax Credit Regulatory Agreement the recertification provisions of this Section shall control.
Immediately prior to the first anniversary date of the occupancy of a Unit by an Eligible Tenant
and on each anniversary date thereafter, Participant shall recertify the income of such Eligible
Tenant by obtaining a completed Income Computation and Certification based upon the current
income of each occupant of the Unit. In the event the recertification demonstrates that such
household's income exceeds the income at which such household originally qualified, such
household will no longer aualify as an Eligible Tenant. With respect to the household that no
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longer qualifies as an Eligible Tenant, Participant shall be permitted to increase the rent of that
Unit to market rates. The lease form used by Participant shall contain the foregoing provisions.
Participant shall provide the Agency with a copy of each such recertification with the next
submission of Certificate of Continuing Program Compliance pursuant to Section 3.8.
3.8 Certificate of Continuing Program Compliance. As long as the TCAC Regulatory
Agreement is in effect, Participant shall be deemed to satisfy the Certificate of Continuing
Program compliance requirements of this Section 3.7 by submitting a copy of the Certificate of
Compliance required by the TCAC Regulatory Agreement to Agency, as long as the TCAC
Certificate of Compliance requires the same information as this Section. Upon termination of
the TCAC Regulatory Agreement the Certificate of Compliance provisions of this Section shall
control. After termination of the TCAC Regulatory Agreement and upon the issuance of the
Release of Construction Covenants and by September 1 of the immediately preceding fiscal year
ending on June 1, Participant shall annually advise the Agency of the occupancy of the Project
by delivering a Certificate of Continuing Program Compliance in the form attached hereto as
Attachment No. 2 stating (i) the dwelling units of the Project which were occupied or deemed
occupied by Eligible Tenants during such period and (ii) that to the knowledge of Participant
either (a) no umemedied default has occurred under this Agreement, or (b) a default has
occurred, in which event the Certificate shall describe the nature of the default and set forth the
measures being taken by the Participant to remedy such default. After termination of the TCAC
Regulatory Agreement, and in any year in which the TCAC Regulatory Agreement Certificate of
Compliance does not provide the information required by this Section, Participant shall to pay
Agency an annual fee pursuant to Health and Safety Code Section 33418(c) which shall not
exceed FIVE HUNDRED DOLLARS ($500) as such amount shall be permitted to increase by
the Consumer Price Index ("CPI") published by the United States Department of Labor, Bureau
of Labor Statistics, for Urban Wage Earners and Clerical Workers, Los Angeles -Long Beach -
Anaheim Average, All Items (1984 ` 100), from and after the date of this Agreement, or the CPI
is discontinued, such official index as may then be in existence and which is most nearly
equivalent to the CPI.
3.9 Maintenance of Records. Participant shall maintain complete and accurate
records pertaining to the Units, and shall permit, during normal business hours and upon
reasonable notice, any duly authorized representative of the Agency to inspect the books and
records of Participant pertaining to the Project including, but not limited to, those records
pertaining to the occupancy of the Units.
3.10 Reliance on Tenant Representations. Each tenant lease shall contain a provision
to the effect that Participant has relied on the income certification and supporting information
supplied by the tenant in determining qualification for occupancy of the Unit, and that any
material misstatement in such certification (whether or not intentional) will be cause for
immediate termination of such lease.
3.11 Conflicts. The leasing preference provision set forth in Section 3.5 shall apply
only in the event, and to the extent, such provisions are not in conflict with Internal Revenue
Code provisions, IRS regulations, the Low Income Tax Credit Program, or the TCAC Regulatory
Agreement (as such terms are defined in the AHA).
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3.12 Remedy For Excessive Rent Charge.
3.12.1 It shall constitute a default for Participant to charge or accept for An
Affordable Unit rent amounts in excess of the amount provided for in Section 3.2 of this
Agreement. In the event that Participant charges or receives such higher rental amounts, in
addition to any other remedy Agency shall have for such default, Participant shall be required to
pay to Agency an amount equal to two (2) times the entire amount of rent received in excess of
the amount permitted pursuant to this Agreement.
3.12.2 It shall constitute a default for Participant to rent any Affordable Unit to
a tenant who is not an Eligible Tenant. In the event Participant rents a unit to an ineligible
tenant, in addition to any other equitable remedy Agency shall have for such default, Participant,
for each separate violation shall be required to pay to Agency an amount equal to (i) two times
the greater of (A) the total rent Participant received from such ineligible tenant, or (B) the total
rent Participant was entitled to receive for renting that Affordable Unit, plus (ii) any relocation
expenses incurred by Agency or the City of La Quinta as a result of Participant having rented to
m w such ineligible person.
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ti 3.12.3 It shall constitute a default for Participant to rent any of the Units to
violation of the leasing preference requirements of Sections 3.5 of this Agreement. In the event
Participant rents a unit in violation of the leasing preference requirements, in addition to any
other equitable remedy Agency shall have for such default, Participant, for each separate
violation shall be required to pay Agency an amount equal to two (2) months of rental charges.
The terms of this Section shall not apply if Participant rents to an ineligible person as a result of
such person's fraud or misrepresentation.
THE PARTIES HERETO AGREE THAT THE AMOUNTS SET FORTH IN
SECTION 3.11 (THE "DAMAGE AMOUNTS") CONSTITUTE A
REASONABLE APPROXIMATION OF THE ACTUAL DAMAGES THAT
AGENCY WOULD SUFFER DUE TO THE DEFAULTS BY PARTICIPANT
�- SET FORTH IN SECTIONS 3.11.1 THROUGH 3.11.3, CONSIDERING ALL
OF THE CIRCUMSTANCES EXISTING ON THE EFFECTIVE DATE OF
THIS AGREEMENT, INCLUDING THE RELATIONSHIP OF THE DAMAGE
AMOUNTS TO THE RANGE OF HARM TO AGENCY AND
ACCOMPLISHMENT OF AGENCY'S PURPOSE OF ASSISTING IN THE
PROVISION OF AFFORDABLE HOUSING TO ELIGIBLE TENANTS THAT
REASONABLY COULD BE ANTICIPATED AND THE ANTICIPATION
THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY OR
INCONVENIENT. THE AMOUNTS SET FORTH IN THIS SECTION 3.11
SHALL BE THE SOLE MONETARY DAMAGES REMEDY FOR THE
DEFAULTS SET FORTH IN THIS SECTION 3.11, BUT NOTHING IN THIS
SECTION 3.11 SHALL BE INTERPRETED TO LIMIT AGENCY'S REMEDY
FOR SUCH DEFAULT TO SUCH A DAMAGES REMEDY. IN PLACING ITS
INITIAL AT THE PLACES PROVIDED HEREINBELOW, EACH PARTY
SPECIFICALLY CONFIRMS THE ACCURACY OF THE STATEMENTS
MADE ABOVE AND THE FACT THAT EACH PARTY HAS BEEN
REPRESENTED BY COUNSEL WHO HAS EXPLAINED THE
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CONSEQUENCES OF THE LIQUIDATED DAMAGES PROVISION AT OR
PRIOR TO THE TIME EACH EXECUTED THIS AGREEMENT.
PARTICIPANT'S INITIALS:
4. MAINTENANCE.
AGENCY'S INITIALS:
4.1 Maintenance Obligation. Participant agrees to and shall maintain all interior and
exterior improvements, including landscaping, on the Site in good condition and repair (and, as
to landscaping, in a healthy condition) and in accordance with the all permits and approvals for
the Project, and all other applicable laws, rules, ordinances, orders, and regulations of all federal,
state, county, municipal, and other governmental agencies and bodies having or claiming
jurisdiction and all their respective departments, bureaus, and officials. Agency places prime
importance on quality maintenance to protect its investment and to ensure that all Agency -
assisted affordable housing projects within the City are not allowed to deteriorate due to below -
average maintenance. Maintenance standards shall include:
(a) No improperly maintained landscaping shall be visible from public rights -
of -way, including:
(1) no lawns with grasses in excess of six (6) inches in height;
(2) no trees, shrubbery, lawns, and other plant life dying from lack of
water or other necessary maintenance;
pruning;
and
(3) no trees, hedges, or shrubbery grown uncontrolled without proper
(4) no vegetation so overgrown as to be likely to harbor rats or vermin;
(5) no dead, decayed, or diseased trees, weeds, and other vegetation.
(b) No yard areas shall be left unmaintained, including:
(1) no broken or discarded furniture, appliances, and other household
equipment stored in yard areas for periods exceeding one (1) week;
(2) no packing boxes, lumber, trash, dirt, and other debris stored in
yards for periods exceeding one (1) week in areas visible from public property or neighboring
properties;
(3) no unscreened trash cans, bins, or containers stored for
unreasonable periods in areas visible from public property or neighboring properties; and
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(4) no vehicles parked or stored in areas other than approved parking
(c) No buildings may be left in an unmaintained condition, including:
(1) no violations of state law, Uniform Codes, or City ordinances;
(2) no condition that constitutes an unsightly appearance that detracts
from the aesthetics or property value of the subject property or constitutes a private or public
nuisance;
(3) no broken windows or chipped, cracked, or peeling paint; and
(4) no conditions constituting hazards and/or inviting trespassers or
malicious mischief; and
(5) no graffiti.
Normal wear and tear of the Site improvements will be acceptable to Agency assuming
Participant agrees to perform all necessary Site improvements to assure the Site is maintained in
good condition. Participant shall make all repairs and replacements necessary to keep the
improvements in good condition and repair. The maintenance covenant contained in this Section
shall remain in effect until the date that is fifty-five (55) years following the issuance of the
Release of Construction Covenants. In the event that Participant breaches any of the covenants
contained in this Section and such default continues for a period of ten (10) days after written
notice from Agency (with respect to graffiti, debris, waste material, and general maintenance) or
thirty (30) days after written notice from Agency (with respect to landscaping and building
improvements), then Agency, in addition to whatever other remedy it may have at law or in
equity, shall have the right, but not the obligation, to enter upon the Site and perform all acts and
work necessary to protect, maintain, and preserve the improvements and landscaped areas on the
Site, and to attach a lien on the Site, or to assess the Site, in the amount of the expenditures
arising from such acts and work of protection, maintenance, and preservation by Agency and/or
costs of such cure, including a fifteen percent (15%) administrative charge, which amount shall
be promptly paid by Participant to Agency upon demand.
4.2 Lien. If the costs incurred pursuant to Section 4.1 are not reimbursed within thirty
(30) days after Participant's receipt of notice thereof, the same shall be deemed delinquent, and
the amount thereof shall bear interest thereafter at a rate of ten percent (10%) per annum until
paid. Any and all delinquent amounts, together with said interest, costs and reasonable
attorney's fees, shall be a lien and charge, with power of sale, upon the property interests of
Participant, and the rents, issues and profits of such property. Agency may bring an action at law
against Participant obligated to pay any such sums or foreclose the lien against Participant's
property interests. Any such lien may be enforced by sale by the Agency following recordation
of a Notice of Default of Sale given in the manner and time required by law as in the case of a
deed of trust; such sale to be conducted in accordance with the provisions of Section 2924, et
sue., of the California Civil Code, applicable to the exercise of powers of sale in mortgages and
deeds of trust, or in any other manner permitted by law.
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Any monetary lien provided for herein shall be subordinate to any bona fide mortgage or
deed of trust covering an ownership interest in and to the Site, and any purchaser at any
foreclosure or trustee's sale (as well as any deed or assignment in lieu of foreclosure or trustee's
sale) under any such mortgage or deed of trust shall take title free from any such monetary lien,
but otherwise subject to the provisions hereof; provided that, after the foreclosure of any such
mortgage and/or deed of trust, all other assessments provided for herein to the extent they relate
to the expenses incurred subsequent to such foreclosure, assessed hereunder to the purchaser at
the foreclosure sale, as owner of the subject parcel after the date of such foreclosure sale, shall
become a lien upon such parcel upon recordation of a Notice of Assessment or Notice of Claim
of Lien as herein provided.
5.0 RESERVE ACCOUNTS.
m 5.1 Capital Replacement Reserve. Participant shall comply with the following
m m o requirements pertaining to the creation and maintenance of a Capital Replacement Reserve:
mNm
ti 5.1.1 Participant shall, or cause the Property Manager to, annually set aside the
higher of $200 per unit per year, subject to annual increase in accordance with the CPI
Adjustment, as hereinafter defined, or the amount required by the Tax Credit Regulatory
Agreement, as reserves for replacement into a separate interest -bearing trust account (the
"Capital Replacement Reserve"). The Capital Replacement Reserve deposit shall be the amount
established by the Tax Credit Regulatory Agreement if that agreement requires it to override
other agreements on this matter, and that Capital Replacement Reserve deposit shall continue in
effect each year for the entire 55-year term of this Agreement regardless of whether Tax Credits
�= remain applicable to the Property. Funds in the Capital Replacement Reserve shall be used for
capital replacements to the Site's fixtures and equipment which are normally capitalized under
generally accepted accounting principles. As capital repairs and improvements of the Site
become necessary, the Capital Replacement Reserve shall be the first source of payment
therefor; provided, however, that Participant may first use other funds for payment with the prior
consent of Agency's Executive Director, which approval may be given or withheld in the
Executive Director's sole and absolute discretion
5.1.2 The non -availability of funds in the Capital Replacement Reserve does not
in any manner relieve Participant of the obligation to undertake necessary capital repairs and
improvements and to continue to maintain the Site in the manner prescribed in this Agreement
and in the ABA. Participant, at its expense, shall submit to the Executive Director on not less
than an annual basis an accounting for the Capital Replacement Reserve.
5.1.3 Capital repairs to and replacement of items shall include only those items
with a long useful life, including without limitation the following:
(a) Carpet and drape replacement;
(b) Appliance replacement;
(c) Exterior painting, including exterior trim;
(d) Hot water heater replacement;
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(e) Plumbing fixtures replacement, including tubs and showers, toilets,
lavatories, sinks, faucets;
(f) Air conditioning and heating replacement;
(g) Asphalt repair and replacement, and seal coating;
(h) Roofing repair and replacement;
(i) Landscape tree replacement and irrigation pipe and controls replacement;
(j) Gas line pipe replacement;
m
(k) Lighting fixture replacement;
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(m) Miscellaneous motors and blowers; and
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(n) Common area furniture replacement, and common area repainting.
5.2 Operating Reserve. Participant, prior to the renting of any residential unit on the
Site, shall establish and fund an operating reserve to insure sufficient operating funds in the event
lease -up does not occur as rapidly as desired. The initial deposit shall be the higher of $150,000
or the amount established by the Tax Credit Regulatory Agreement. Unless a greater period is
required to maintain the operating reserve, the initial operating reserve shall be maintained until
the Project units are ninety percent (90%) rented.
6.0 MANAGEMENT.
6.1 On -Site Manager. Participant shall manage or shall cause the Site to be managed
in a prudent and business -like manner, One (1) of the Units on the Site, which however shall not
be one of the Affordable Units, shall be devoted to an on -site resident manager who shall be
experienced and qualified in the management of a senior citizen apartment rental complex.
Participant may contract with a management company or manager to operate and maintain the
Site in accordance with the terms of this Agreement (hereinafter "Property Manager" or
"Management Company"); provided, however, that the selection and hiring of such management
company shall be subject to approval by Agency's Executive Director. Prior to obtaining such
approval, Participant shall act as manager. Approval of a management company or manager by
the Executive Director shall not be unreasonably withheld provided that the management
company or manager has the requisite experience level and performance record. The
management company or manage may be an affiliate of Participant subject to Section 22.
6.2 Gross Mismanagement. In the event of "Gross Mismanagement" (as that tetra is
defined below) of the Project, Agency shall have the authority to require that such Gross
Mismanagement cease immediately, and further to require the immediate replacement of the
Manager. Agency shall provide written notice to Participant of the event(s) of Gross
Mismanagement occurring and Participant shall have ten (10) days after receipt of such notice to
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cure, correct, or remedy the event(s) of Gross Mismanagement identified in the Agency's notice
and to notify the Agency's Executive Director of the cure, correction, or remedy. For purposes
of this Agreement the term "Gross Mismanagement" shall mean management of the Project in a
manner which violates the terms and/or intention of this Agreement to operate a senior citizen
affordable housing complex of the highest standard, and shall include, but is not limited to, the
following:
6.2.1 Knowingly leasing to ineligible tenants or tenants whose income exceeds
the prescribed levels;
6.2.2 Knowingly allowing the tenants to exceed the prescribed occupancy levels
without taking immediate steps to stop such overcrowding;
6
M 6.2.3 W.Failing to timely maintain the Project and the Site in the manner required
m o by this Agreement or failing to submit materially complete reports;
mOw
N ° 6.2.4 Knowingly withholding the reports as required by this Agreement;
6.2.5 Fraud in connection with any document or representation relating to this
Agreement or embezzlement of Project monies; and
6.2.6 Failing to fully cooperate with law enforcement in maintaining a crime -
free environment on the Site.
6.3 Lease Approval. Agency shall have the right to approve any lease forms,
revisions, amendments and modification made to same, used by Participant or the resident
manager for leasing units within the Site, which approval shall not be unreasonably withheld.
7.0 COMPLIANCE WITH LAWS; ENVIRONMENTAL MATTERS.
7.1 Compliance With Laws. Participant shall comply with (i) all ordinances,
regulations and standards of the City, Agency, County of Riverside, , any regional governmental
entity, State of California, and federal government applicable to the Property; (ii) all rules and
— regulations of any assessment district of the City with jurisdiction over the Property; and (iii) all
applicable labor standards of California law and federal law, including the payment of prevailing
wages; and (iv) the requirements of federal laws with respect to the leasing of units or the
employment of undocumented workers or illegal aliens.
7.2 Environmental Matters.
7.2.1 Definitions. For the purposes of this Agreement, unless the context
otherwise specifies or requires, the following terms shall have the meanings herein specified:
7.2.1.1 The term "Hazardous Materials" shall mean any substance,
material, or waste which is or becomes regulated by any local governmental authority, the
County of Los Angeles, the State of California, a regional governmental authority, or the United
States Government, including, but not limited to, any material or substance which is (i) defined
as a "hazardous waste," "extremely hazardous waste," or "restricted hazardous waste" under
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Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health
and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law)), (ii) defined as a
"hazardous substance" under Section 25316 of the California Health and Safety Code, Division
20, Chapter 6.8 (Carpenter -Presley -Tanner Hazardous Substance Account Act), (iii) defined as a
"hazardous material," "hazardous substance," or "hazardous waste" under Section 25501 of the
California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release
Response Plans and Inventory), (iv) defined as a "hazardous substance" under Section 25281 of
the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of
Hazardous Substances), (v) petroleum, (vi) friable asbestos, (vii) polychlorinated byphenyls,
(viii) listed under Article 9 or defined as "hazardous" or "extremely hazardous" pursuant to
Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (ix)
designated as "hazardous substances" pursuant to Section 311 of the Clean Water Act (33 U.S.C.
1317), (x) defined as a "hazardous waste" pursuant to Section 1004 of the Resource
�9M Conservation and Recovery Act, 42 U.S.C..6901 et sec. (42 U.S.C..6903) or (xi) defined as
M Z.0 "hazardous substances" pursuant to Section 101 of the Comprehensive Environmental Response,
" Compensation, and Liability Act, 42 U.S.C., 9601 et sue.
m�
N �
7.2.1.2 The term "Hazardous Materials Contamination" shall mean the
contamination (whether presently existing or hereafter occurring) of the improvements, facilities,
soil, groundwater, air or other elements on, in or of the Site by Hazardous Materials, or the
contamination of the buildings, facilities, soil, groundwater, air or other elements on, in or of any
other property as a result of Hazardous Materials at any time emanating from the Site.
_ 7.2.1.3 The term "Governmental Requirements" shall mean all past,
present and future laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the
C United States, the state, the county, the city, or any other political subdivision in which the Site is
located, and any other state, county city, political subdivision, agency, instrumentality or other
entity exercising jurisdiction over the Site.
7.2.2 Indemnity. Participant shall save, protect, defend, indemnify and hold
harmless Agency and its officers, officials, members. employees, agents, and representatives
from and against any and all liabilities, suits, actions, claims, demands, penalties, damages
(including, without limitation, penalties, fines and monetary sanctions), losses, costs or expenses
(including, without limitation, consultants' fees, investigation and laboratory fees, reasonable
attorneys' fees and remedial and response costs) (the foregoing are hereinafter collectively
referred to as "Liabilities") which may now or in the future be incurred or suffered by Agency
and its officers, officials, members. employees, agents, or representatives by reason of, resulting
from, in connection with, or existing in any manner whatsoever as a direct or indirect result of
(1) the presence on or under, or escape, seepage, leakage, spillage, discharge, emission or release
from the Site of any Hazardous Materials or Hazardous Materials Contamination after the
commencement of this Lease, including any Liabilities incurred under any Governmental
Requirements relating to such Hazardous Materials or Hazardous Materials Contamination, and
(2) the performance by Participant of any acts, including, but not limited to, the performance of
any act required by this Agreement.
7.3 Duty to Prevent Hazardous Material Contamination. Participant shall take all
necessary precautions to prevent the release of any Hazardous Materials into the environment.
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Such precautions shall include compliance with all Governmental Requirements with respect to
Hazardous Materials. In addition, Participant shall install and utilize such equipment and
implement and adhere to such procedures as are consistent with the standards generally applied
by apartment complexes in Riverside County, California as respects the disclosure, storage, use,
removal, and disposal of Hazardous Materials.
7A Obligation of Participant to Remediate Premises. Notwithstanding the obligation
of Participant to indemnify Agency and its officers, officials, members, employees, agents, and
representatives pursuant to Section 7.2.2, Participant shall, at its sole cost and expense, promptly
take (i) all actions required by any federal, state, regional, or local governmental agency or
political subdivision or any Governmental Requirements and (ii) all actions necessary to make
full economic use of the Site for the purposes contemplated by this Agreement and the AHA,
mN which requirements or necessity arise from the presence upon, about or beneath the Site of any
Mm o Hazardous Materials or Hazardous Materials Contamination no matter when occurring. Such
m N a actions shall include, but not be limited to, the investigation of the environmental condition of
the Site, the preparation of any feasibility studies or reports and the performance of any cleanup,
ti 6 remedial, removal or restoration work. Participant shall take all actions necessary to promptly
restore the Site to an environmentally sound condition for the uses contemplated by this
Agreement and the AHA notwithstanding any lesser standard of remediation allowable under
applicable Governmental Requirements.
7.5 Environmental Inquiries. Participant, when it has received any notices of
violation, notices to comply, citations, inquiries, clean-up or abatement orders, or cease and
desist orders related to Hazardous Materials or Hazardous Materials Contamination, or when
Participant is required to report to any governmental agency, any violation or potential violation
of any Governmental Requirement pertaining to Hazardous Materials or Hazardous Materials
MEE
Contamination, shall concurrently notify Agency's Executive Director, and provide to him/her a
copy or copies, of the environmental permits, disclosures, applications, entitlements or inquiries
relating to the Site, the notices of violation, notices to comply, citations, inquiries, clean-up or
s abatement orders, cease and desist orders, reports filed pursuant to self -reporting requirements,
and reports filed or applications made pursuant to any Governmental Requirement relating to
Hazardous Materials and underground tanks, and Participant shall report to the Executive
Director, as soon as possible after each incident, any unusual, potentially important incidents.
In the event of a release of any Hazardous Materials into the environment, Participant
shall, as soon as possible after the release, furnish to the Executive Director a copy of any and all
reports relating thereto and copies of all correspondence with governmental agencies relating to
the release. Upon request of the Executive Director, Participant shall furnish to the Executive
Director a copy or copies of any and all other environmental entitlements or inquiries relating to
or affecting the Site including, but not limited to, all permit applications, permits and reports
including, without limitation, those reports and other matters which may be characterized as
confidential.
8.0 INSURANCE.
8.1 Duty to Procure Insurance. Participant covenants and agrees for itself, and its
assigns and successors -in -interest in the Site that from and after the date of this Agreement, and
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continuing thereafter until the date that is fifty-five (55) years after the date of issuance of the
Release of Construction Covenants, Participant or such successors and assigns shall procure and
keep in full force and effect or cause to be procured and kept in full force and effect for the
mutual benefit of Participant and Agency, and shall provide Agency evidence reasonably
acceptable to Agency Executive Director, insurance policies meeting the minimum requirements
set forth below:
8.1.1 Commercial General Liability insurance with respect to the Site and the
operations of or on behalf of Participant, in an amount not less than Three Million Dollars
($3,000,000) per occurrence combined single limit including products, completed operations,
contractual, bodily injury, personal injury, death and property damage liability per occurrence,
subject to such increases in amount as Agency may reasonably require from time to time;
provided, that the percentage increase in coverage shall not be required to exceed the percentage
increase in the Consumer Price Index published by the United States Department of Labor,
Bureau of Labor Statistics, for Urban Wage Earners and Clerical Workers, Los Angeles -Long
Beach -Anaheim Average, All Items (1984 ` 100) (the "Index"), from and after the date of this
Agreement, or, if said Index is discontinued, such official index as may then be in existence and
which is most nearly equivalent to said Index (the "CPI Adjustment"). Unless otherwise
approved in advance by the Agency Executive Director, the insurance to be provided by
Participant may provide for a deductible or self -insured retention of not more than Ten Thousand
Dollars ($10,000), with such maximum amount to increase at the same rate as the periodic
increases in the minimum amount of total insurance coverage set forth above.
8.1.2 With respect to the improvements and any fixtures and furnishings to be
owned by Participant on the Site, All Risk Property insurance against fire, extended coverage,
vandalism, and malicious mischief, and such other additional perils, hazards, and risks as now
are or may be included in the standard "all risk" form in general use in Riverside County,
California, with the standard form fire insurance coverage in an amount equal to full actual
replacement cost thereof, as the same may change from time to time. The above insurance
policy or policies shall include coverage for earthquake to the extent generally and commercially
available at commercially reasonable rates. Agency shall be a loss payee under such policy or
policies and such insurance shall contain a replacement cost endorsement.
8.2 Policy Requirements. All policies of insurance required to be carried by
Participant shall meet the following requirements and contain the following endorsements,
provisions, or clauses (as applicable):
8.2.1 The policies shall be written by responsible and solvent insurance
companies licensed in the State of California and having a policyholder's rating of A or better, in
the most recent addition of `Best's Key Rating Guide -- Property and Casualty." A copy of each
paid -up policy evidencing such insurance (appropriately authenticated by the insurer) or a
certificate of the insurer, certifying that such policy has been issued, providing the coverage
required herein, and containing the provisions specified herein, shall be delivered to Agency on
or prior to the date of this Agreement, and thereafter, upon renewals, not less than thirty (30)
days prior to the expiration of coverage. Agency may, at any time, and from time to time,
inspect and/or copy any and all insurance policies required to be procured by Participant
111111111111111111111111111111111111111111111111111111111111118126015 0f' 2 R
5 £ 3
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hereunder. In no event shall the limits of any policy be considered as limiting the liability of
Participant hereunder.
8.2.2 The insurer shall not cancel or materially alter the coverage provided by
such policy in a manner adverse to the interest of the insured without first giving Agency a
minimum of thirty (30) days prior written notice by certified mail, return receipt requested; and
8.2.3 A waiver by the insurer of any right to subrogation against Agency, its
officers, officials, members, employees, agents, or representatives, which arises or might arise by
reason of any payment under such policy or policies or by reason of any act or omission of
Agency, its officers, officials, members, employees, agents, or representatives.
8.2.4 The Agency and its officers, officials, members, employees, agents, and
representatives shall be named insureds on the Commercial General Liability policies.
8.2.5 The Agency shall be named as loss payee on the All Risk Property
insurance policies.
8.2.6 Coverage provided by these policies shall be primary and non-
contributory to any insurance carried by the Agency or its officers, officials, members,
employees, agents, or representatives.
8.2.7 Failure to comply with reporting provisions shall not affect coverage
provided to Agency and its officers, officials, members, employees, agents, or representatives.
8.3 Failure to Procure Insurance. If Participant fails to procure and maintain the
above -required insurance despite its availability, then Agency, in addition to any other remedy
which Agency may have hereunder for Participant's failure to procure, maintain, and/or pay for
the insurance required herein, may (but without any obligation to do so) at any time or from time
to time, after thirty (30) days written notice to Participant, procure such insurance and pay the
premiums therefor, in which event Participant shall immediately repay Agency all sums so paid
by Agency together with interest thereon at the maximum legal rate.
9.0 OBLIGATION TO REPAIR.
9.1 Obligation to Repair and Restore Damage Due to Casualty Covered by Insurance.
Subject to Section 9.3 below, if the Project shall be totally or partially destroyed or rendered
wholly or partly uninhabitable by fire or other casualty required to be insured against by
Participant, Participant shall promptly proceed to obtain insurance proceeds and take all steps
necessary to begin reconstruction and, immediately upon receipt of insurance proceeds, to
promptly and diligently commence the repair or replacement of the Project to substantially the
same condition as the Project is required to be maintained in pursuant to this Agreement, whether
or not the insurance proceeds are sufficient to cover the actual cost of repair, replacement, or
restoration, and Participant shall complete the same as soon as possible thereafter so that the
Project can continue to be operated and occupied as an affordable housing project in accordance
with this Agreement. Subject to extensions of time for "force majeure" events described in the
AHA, in no event shall the repair, replacement, or restoration period exceed one (1) year from
the date Participant obtains insurance proceeds unless the Agency Executive Director, in his or
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her sole and absolute discretion, approves a longer period of time. Agency shall cooperate with
Participant, at no expense to Agency, in obtaining any governmental permits required for the
repair, replacement, or restoration. If, however, the then -existing laws of any other
governmental agencies with jurisdiction over the Property do not permit the repair, replacement,
or restoration, Participant may elect not to repair, replace, or restore the Project by giving notice
to Agency (in which event Participant shall be entitled to all insurance proceeds but Participant
shall be required to remove all debris from the Property) or Participant may reconstruct such
other improvements on the Property as are consistent with applicable land use regulations and
approved by the City, Agency, and the other governmental agency or agencies with jurisdiction.
If Participant fails to obtain insurance as required by the AEA or this Agreement (and
Agency has not procured such insurance and charged Participant for the cost), Participant shall
be obligated to reconstruct and repair any partial or total damage to the Project and
improvements located on the site in accordance with this Section 9.1.
9.2 Continued Operations. During any period of repair, Participant shall continue, or
cause the continuation of, the operation of the senior citizen apartment complex on the Site to the
extent reasonably practicable from the standpoint of prudent business management.
9.3 Damage or Destruction Due to Cause Not Required to be Covered by Insurance.
If the improvements comprising the Project are completely destroyed or substantially damaged
by a casualty for which Participant is not required to (and has not) insure against, then
Participant shall not be required to repair, replace, or restore such improvements and may elect
not to do so by providing Agency with written notice of election not to repair, replace, or restore
within ninety (90) days after such substantial damage or destruction. In such event, Participant
shall remove all debris from the Property. As used in this Section 9.3, "substantial damage"
caused by a casualty not required to be (and not) covered by insurance shall mean damage or
destruction which is fifty percent (50%) or more of the replacement cost of the improvements
comprising the Project. In the event Participant does not timely elect not to repair, replace, or
restore the improvements as set forth in the first sentence of this Section 9.3, Participant shall be
conclusively deemed to have waived its right not to repair, replace, or restore the improvements
and thereafter Participant shall promptly commence and complete the repair, replacement, or
restoration of the damaged or destroyed improvements in accordance with Section 9.1 above and
continue operation of the apartment complex during the period of repair (if practicable) in
accordance with Section 9.2 above.
10.0 LIMITATION ON TRANSFERS.
10.1 Sale or Transfer of the Project. Participant covenants that during the term of this
Agreement, Participant shall not assign this Agreement or transfer the Site or any of its interests
therein except as provided in this Section 10.0.
10.2 Transfer Defined. As used in this Section 10.0, the term "Transfer" shall include
any assignment, hypothecation, mortgage, pledge, conveyance, or encumbrance of this
Agreement, the Site, or the improvements thereon except as permitted by this Agreement and the
AHA. A Transfer shall also include the transfer to any person or group of persons acting in
concert of more than twenty-five percent (25%) (in the aggregate) of the present ownership
11111111111111111111111111111111111111111111111111111111012001e0 fay2
394/015610-0026 17
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and/or control of any person or entity constituting Participant, taking all transfers into account on
a cumulative basis. In the event any entity constituting Participant, its successor or the
constituent partners or members of Participant or any successor of Participant, is a corporation or
trust, such transfer shall refer to the transfer of the issued and outstanding capital stock of such
corporation, or of beneficial interests of such trust. In the event that any entity constituting
Participant, its successor or the constituent partners of Participant or any successor of Participant
is a limited or general partnership, such transfer shall refer to the transfer of more than twenty-
five percent (25%) of such limited or general partnership interest. In the event that any entity
constituting Participant, its successor or the constituent members of Participant or any successor
of Participant is a limited liability company, such transfer shall refer to the transfer of more than
twenty-five percent (25%) of such membership interest. In the event that any entity constituting
Participant, its successor or the constituent partners of Participant or any successor of Participant
is a joint venture, such transfer shall refer to the transfer of more than twenty-five percent (25%)
of the ownership and/or control of any such joint venture partner, taking all transfers into account
on a cumulative basis.
10.3 Agency Approval of Transfer Required. Except as permitted by this Agreement
and the AHA, Participant shall not Transfer this Agreement or any of Participant's rights
hereunder, or any interest in the Site or in the improvements thereon, directly or indirectly,
voluntarily or by operation of law, without the prior written approval of Agency, which approval
may be withheld in Agency's good faith discretion, and any such purported Transfer without
such approval shall be null and void. Any consideration received by Participant in connection
with an approved assignment or transfer shall be remitted to Agency and shall reduce the
outstanding principal balance of the Agency Note. A Transfer for financing purposes shall not
be approved by the Agency if the loan documents do not state that the loan proceeds must be
used for the Project.
10.4 Assignment and Assumption Agreement. In the absence of specific written
agreement by Agency, no Transfer by Participant of all or any portion of its interest in the Site or
this Agreement shall be deemed to relieve Participant or any successor party from the obligation
to complete the Project or any other obligations under this Agreement. In addition, no attempted
Transfer of any of Participant's obligations hereunder shall be effective unless and until
Participant and the successor party execute and deliver to Agency a binding assignment and
assumption agreement in a form approved by the Agency's legal counsel.
11. OPTION TO REPURCHASE
The Agency's option to repurchase the Property or individual lots thereof as set forth in
Sections 513 of the Affordable Housing Agreement is incorporated herein and made a part
hereof.
12. EVENTS OF DEFAULT BY PARTICIPANT.
Subject to extensions of time pursuant to the terms of Section 23, the occurrence of one
or more of any of the following events shall constitute an "Event of Default" by Participant
hereunder if Participant shall have not cured, corrected, or remedied such failure within, unless a
shorter or longer cure period is provided for specific defaults elsewhere in this Agreement, thirty
0a135asF
111111111111111111111111111IIIIIII11111III111111III1111 011210
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(30) days following the service on Participant of a written notice from Agency specifying the
failure complained of, or if it is not practicable to cure or remedy such failure within such thirty
(30) day period (which impracticality shall not apply to monetary defaults), within such longer
period as shall be reasonable under the circumstances provided that Participant has commenced
to cure within the same thirty (30) day period:
12.1 Construction of the work on the Site has not commenced within the time set forth
in the AHA; or
12.2 Construction of the work on the Site is not completed within the time set forth in
the AHA; or
12.3 Participant shall abandon or surrender the Site; or
12.4 Participant fails or refuses to pay, within ten (10) days of notice from Agency,
any payment due Agency or any other sum due as may be required by this
Agreement, the Agency Note, ABA, or any of the Agency Agreements.
12.5 Participant is in material default of any of the covenants, terms or provisions of
this Agreement, the AHA, or any of the Agency Agreements;
12.6 Participant voluntarily files or has involuntarily filed against it any petition under
any bankruptcy or insolvency act or law and the same not be dismissed within
sixty (60) days thereafter; or
12.7 Participant is adjudicated a bankrupt; or
12.8 Participant makes a general assignment for the benefit of creditors in violation of
the terms of this Agreement or any of the Agency Agreements.
13. REMEDIES OF AGENCY.
In the event Participant defaults in the performance or observance of any covenant,
agreement or obligation of Participant pursuant to this Agreement, and if such default remains
uncured for a period of thirty (30) days after written notice thereof shall have been given by
Agency (or such lesser period as may apply under Section 4.1), or, in the event said default
cannot be cured within said time period, Participant has failed to commence to cure such default
within the applicable time period and diligently prosecute said cure to completion, then Agency
may declare an "Event of Default' to have occurred hereunder, and, at its option, may take one
or more of the following steps:
13.1 Enter the Site and correct or cause to be corrected said default and charge the
costs thereof (including costs incurred by Agency in enforcing this provision) to the account of
Participant , which charge shall be due and payable within thirty (30) days after presentation by
Agency of a statement of all or part of said costs, and if such bill is not timely paid then to place
a lien on the Site for said amount due plus interest at the maximum legal rate;
11111111111111111111111111111111111111111111111111111111111111 e1f�001 aof 2a�A
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13.2 Correct or cause to be corrected said default and pay the costs thereof (including
costs incurred by Agency in enforcing this provision) from the proceeds of any insurance;
13.3 Exercise its right to maintain any and all actions at law or suits in equity to
compel Participant to correct or cause to be corrected said default;
13.4 Have a receiver appointed to take possession of Participant's interest in the Site,
with power in said receiver to administer Participant's interest in the Site, to collect all funds
available to Participant in connection with its operation and maintenance of the Site, and to
perform all other consistent with Participant's obligation under this Agreement as the court
deems proper;
13.5 Terminate this Agreement by written notice to Participant and seek repayments of
all principal and accrued interest then owing on the Agency Note.
�mG
Except as otherwise expressly stated in this Agreement, the rights and remedies of the
mparties are cumulative, and the exercise by any party of one or more of its rights or remedies
shall not preclude the exercise by it, at the same or different times, of any other rights or
remedies for the same default or any other default by another party.
14.0 NONDISCRIMINATION.
14.1 Antidiscrimination. There shall be no discrimination against or segregation of
any person, or group of persons, on account of race, color, creed, religion, sex, marital status,
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Site, or any part thereof, nor shall Participant, or any person claiming under or
through it, establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees of the Site, or any part thereof (except as permitted by this
Agreement).
14.2 Anti -Discrimination Clauses in Agreements. Subject to the tenancy/occupancy
restrictions not prohibited by state or federal law as embodied in this Agreement, which may
modify the following nondiscrimination clauses, including the provisions pertaining to age
discrimination, the following shall apply:
Participant agrees for itself and any successor in interest that Participant shall refrain
from restricting the rental, sale, or lease of any portion of the Site, or contracts relating to the
Site, on the basis of race, color, creed, religion, sex, marital status, ancestry, or national origin of
any person. All such deeds, leases or contracts shall contain or be subject to substantially the
following nondiscrimination or nonsegregation clauses:
14.2.1 In deeds: "The grantee herein covenants by and for himself, his heirs,
executors, administrators, and assigns, and all persons claiming under or through them, that there
shall be no discrimination against or segregation of any person or group of persons on account of
race, color, creed, religion, sex, marital status, ancestry, or national origin in the sale, lease,
sublease, transfer, use, occupancy, tenure, or enjoyment of the land herein conveyed, nor shall
the grantee himself, or any persons claiming under or through him, establish or permit any such
394/015610.0026 20
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practice or practices of discrimination or segregation with reference to the selection, location,
number, use, or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the land
herein conveyed. The foregoing covenants shall run with the land."
14.2.2 In leases: "The lessee herein covenants by and for himself, his heirs,
executors, administrators, and assigns, and all persons claiming under or through him, and this
lease is made and accepted upon and subject to the following conditions:
"That there shall be no discrimination against or segregation of any person or
group of persons on account of status, race, color, creed, religion, sex, marital
status, ancestry, or national origin in the leasing, subleasing, transferring, use,
occupancy, tenure, or enjoyment of the land herein leased, nor shall the lessee
himself, or any person claiming under or through him, establish or permit any
such practice or practices of discrimination or segregation with reference to the
selection, location, number, use, or occupancy of tenants, lessees, sublessees,
subtenants, or vendees in the land herein leased"
14.2.3 In contracts: "There shall be no discrimination against or segregation of
any persons or group of persons on account of status, race, color, creed, religion, sex, marital
status, ancestry, or national origin in the sale, lease, transfer, use, occupancy, tenure, or
enjoyment of land, nor shall the transferee himself, or any person claiming under or through him,
establish or permit any such practice or practices of discrimination or segregation with reference
to the selection, location, number, use, or occupancy of tenants, lessees, subtenants, sublessees,
or vendees of land."
15.0 COVENANTS TO RUN WITH THE LAND.
Participant hereby subjects the Site to the covenants, reservations, and restrictions set
forth in this Agreement. Agency and Participant hereby declare their express intent that all such
covenants, reservations, and restrictions shall be deemed covenants running with the land and
shall pass to and be binding upon the Participant successors in title to the Site; provided,
however, that on the termination of this Agreement said covenants, reservations and restrictions
shall expire. All covenants without regard to technical classification or designation shall be
binding for the benefit of the Agency, and such covenants shall run in favor of the Agency for
the entire term of this Agreement, , without regard to whether the Agency is or remains an owner
of any land or interest therein to which such covenants relate. Each and every contract, deed or
other instrument hereafter executed covering or conveying the Site or any portion thereof shall
conclusively be held to have been executed, delivered and accepted subject to such covenants,
reservations, and restrictions, regardless of whether such covenants, reservations, and restrictions
are set forth in such contract, deed or other instrument.
Agency and Participant hereby declare their understanding and intent that the burden of
the covenants set forth herein touch and concern the land in that Participant's legal interest in the
Site is rendered less valuable thereby. Agency and Participant hereby further declare their
understanding and intent that the benefit of such covenants touch and concern the land by
enhancing and increasing the enjoyment and use of the Project by Eligible Tenants, the intended
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beneficiaries of such covenants, reservations, and restrictions, and by furthering the public
purposes for which the Agency was formed.
Participant, in exchange for the Agency entering into the ABA, hereby agrees to hold,
sell, and convey the Site subject to the terms of this Agreement. Participant also grants to the
Agency the right and power to enforce the terms of this Agreement against the Participant and all
persons having any right, title or interest in the Site or any part thereof, their heirs, successive
owners and assigns.
16.0 INDEMNIFICATION.
Participant agrees for itself and its successors and assigns to indemnify, defend, and hold
harmless Agency, City, and their respective officers, officials, members, employees, agents, and
representatives from and against any loss, liability, claim, or judgment relating in any manner to
the Project excepting only any such loss, liability, claim, or judgment arising out of the
intentional wrongdoing or gross negligence of Agency, City, or their respective officers,
officials, members, employees, agents, or representatives. The foregoing indemnification,
defense, and hold harmless agreement shall only be applicable to and binding upon the party then
owning the Property or applicable portion thereof.
17.0 UTILITIES AND TAXES.
Participant, while in possession of the Property, and each successor or assign of
Participant while in possession of the Property, shall remain fully obligated for the payment of (i)
real and personal property taxes and assessments in connection with the Property, and (ii) all
charges for all utilities serving the Property.
18.0 ATTORNEYS' FEES.
In the event that a party to this Agreement brings an action against the other party hereto
by reason of the breach of any condition, covenant, representation or warranty in this Agreement,
or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to
recover from the other expert witness fees, and its reasonable attorney's fees and costs.
Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to
attorney's fees shall be entitled to all other reasonable costs for investigating such action,
including the conducting of discovery.
19.0 AMENDMENTS.
This Agreement shall be amended only by a written instrument executed by the parties
hereto or their successors in title, and duly recorded in the real property records of the County of
Riverside.
20.0 NOTICE.
Formal notices, demands, and communications between Agency and Participant shall be
sufficiently given if personally delivered, delivered by a reputable same -day or overnight courier
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services that provides a receipt showing date and time of delivery, or delivered by United States
mail, registered or certified, postage prepaid, return receipt requested, to the following addresses:
If to Agency: La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Executive Director
With a copy to: Rutan & Tucker, LLP
611 Anton Boulevard, Suite 1400
Costa Mesa, CA 92626
Attn: M. Katherine Jenson, Esq.
If to Participant: DC & TC, LLC
71-084 Tamarisk Lane
Rancho Mirage, CA 92270
Attn: Michael Shovlin
All notices personally delivered or delivered by messenger shall be deemed effective
upon receipt, and mailed notices shall be effective as of the earlier of (i) actual receipt, or (ii)
expiration of forty-eight (48) hours after depositing in the United States Postal System in the
manner described in this Section. Such written notices, demands, and communications may be
sent in the same manner to such other addresses as a party may from time to time designate by
mail.
21. NONLIABILITY OF AGENCY OFFICIALS.
No officer, official, member, employee, agent, or representative of Agency shall be
personally liable to Participant, or any successor in interest, in the event of any default or breach
by Agency or for any amount which may become due to Participant or successor or on any
obligations under the terms of this Agreement or any of the Agency Agreements.
22. TRANSACTIONS WITH AFFILIATES.
Participant shall have the right to enter into contracts with subsidiaries, affiliates and
other related entities for the purpose of providing cleaning, maintenance and repair services,
insurance policies and other purposes related to the operation of the Site, provided that all such
costs and charges are competitive with the costs, charges, rent and other sums which would be
paid by or to, as the case may be, an unrelated third party, and further provided that all such
contracts and transactions are disclosed to Agency's Executive Director, including the costs and
charges of such contracts and transactions.
IIIIIINIIIIIIIIIIIIIIIIIIIIIIIIIIHEIII1111111II11110161
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23. SEVERABILITY/WAIVER/INTEGRATION.
23.1 Severability. If any provision of this Agreement shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining portions hereof shall not
in any way be affected or impaired thereby.
23.2 Waiver. A waiver by either party of the performance of any covenant or
condition herein shall not invalidate this Agreement nor shall it be considered a waiver of any
other covenants or conditions, nor shall the delay or forbearance by either party in exercising any
remedy or right be considered a waiver of, or an estoppel against, the later exercise of such
remedy or right.
23.3 Integration. This Agreement contains the entire Agreement between the parties
concerning the subject matter hereof and neither party relies on any warranty or representation
not contained in this Agreement.
24. ENFORCED DELAY; EXTENSIONS OF TIME.
Performance by a party hereunder shall not be deemed to be in default where delays or
defaults are due to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires;
casualties; supernatural causes; acts of the public enemy; epidemics; quarantine restrictions;
freight embargoes; lack of transportation; governmental restrictions or priority litigation;
unusually severe weather; inability to secure necessary labor, materials or tools; acts of the other
party; acts or the failure to act of a public or governmental agency or entity (except that acts or
the failure to act of Agency shall not excuse performance by Agency unless the act or failure is
caused by the acts or omissions of Participant); or any other causes beyond the reasonable
control or without the fault of the party claiming an extension of time to perform. In the event of
such a delay (herein "Enforced Delay"), the party delayed shall continue to exercise reasonable
diligence to minimize the period of the delay. An extension of time for any such cause shall be
limited to the period of the Enforced Delay, and shall commence to run from the time of the
commencement of the cause, provided notice by the party claiming such extension is sent to the
other party within fifteen (15) days of the commencement of the cause. The following shall not
be considered as events or causes beyond the control of Participant, and shall not entitle
Participant to an extension of time to perform: (i) Participant's failure to obtain financing for the
Project, (ii) Participant's failure to negotiate agreements with prospective tenants or users for the
Project, or (iii) interest rates or economic or market conditions. Times of performance under this
Agreement may also be extended by mutual written agreement by Agency and Participant. The
Agency Executive Director shall also have the authority on behalf of Agency to administratively
approve extensions of time not to exceed a cumulative total of one (1) year.
25. FUTURE ENFORCEMENT.
The parties hereby agree that should the Agency cease to exist as an entity at any time
during the term of this Agreement, the City of La Quints shall have the right to enforce all of the
terms and conditions herein, unless the Agency had previously specified another entity to enforce
this Agreement.
IIIIIII HE 111111111111 IN 3112 2e of& 32GOR
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26. GOVERNING LAW.
This Agreement shall be governed by the laws of the State of California.
27. NO MERGER.
The covenants, terns, and provisions of this Agreement shall not merge with any grant
deed or other instrument pertaining to the conveyance of any interest in real property.
28. COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of which shall
constitute one original and all of which shall be one and the same instrument.
[end - signature page follows]
11111111111111111 III 0112612001 35�8 2
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IN WITNESS WHEREOF, the Agency and Participant have executed this Regulatory
Agreement and Agreement of Covenants, Conditions, and Restrictions For Property by duly
authorized representatives on the date first written hereinabove.
ATTEST:
LA QUINTA REDEVELOPMENT AGENCY, a
public body, corporate and politic
By: By:/ 1ele F�✓��✓r�ar�llz
Thomas Genovese Ak� Tk�r at P (v l ✓ e s e_
Executive Director
"Agency"
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
By:
Attorneys for the La Quinta
Redevelopment Agency
DC & TC, LLC, a California limited liability
company
By: M,trwm� �
Name: MICHAEL J. SCHOVLIN
Its: a,�t Zr-2 z�
"Participant"
111111111111111111111111111111111111111111111111111111al 2aa26 f 3aaR
26 0£ 32
394/015610-0026 26
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STATE OF CALIFORNIA
COUNTY OF RIVERSIDE
ss.
�e r
On DECEMER 14, 2000 before me, ` personally appeared
MICHAEL J. SCHOVLIN** personally known to me (erprared-te-me on
evidence) to be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or
the entity upon behalf of which the person(s) acted, executed the instrument.
Witness my hand and official
[SEAL]
OFFICIAL SEAL
K. WEN
•- COMM A 1192111 n
Nobry Public - Calitomla
(� RIVERSIDE COUNTY ..
My Commfrlon EKpi,N
AUGUST S 2002 mot
111111111111111111111111111111111111111111111111111111 0126�2 0of 2
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State of California
County of Riverside
On Ia"/3o Adtioo before me, Phyllis Manley, Notary Public, personally appeared
Thomas P. Genovese, personally known to me to be the person whose name is subscribed to the
within instrument and acknowledged to me that he executed the same in his authorized capacity, and
that by his signature on the instrument the person or the entity upon behalf of which the person acted,
executed the instrument.
WITNESS my hand and official seal.
(Seal)
1111111111111111111111111111111111111111111111111111111a ?2s�a e3 e3WR
2
28 of 32
ATTACHMENT NO. 1
LEGAL DESCRIPTION OF SITE
REMAINDER PARCEL, OF TRACT NO. 28601-1, AS SHOWN BY MAP ON FILE IN
BOOK 278, PAGES 86 THROUGH 90 OF MAPS, RECORDS OF RIVERSIDE COUNTY,
CALIFORNIA.
1111111111111 Illl llllll llll lllllll lllll 1111111111111111 a135561
?00290 f 2aaR
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ATTACHMENT NO. 2
CERTIFICATE OF CONTINUING PROGRAM COMPLIANCE
LA QUINTA REDEVELOPMENT AGENCY OF THE
CITY OF LA QUINTA, CALIFORNIA
Period Covered
The undersigned, (the "Participant"), has read and
is thoroughly familiar with the provisions of the Affordable Housing Agreement ("AHA") and
documents referred to therein executed by Participant and La Quinta Redevelopment Agency
("Agency") including but not limited to the Regulatory Agreement, as such terms are defined in
the AHA.
As of the date of this Certificate, the following residential units in the Project (i) are
occupied by Eligible Tenants (as such term is defined in the Regulatory Agreement) or (ii) are
currently vacant and being held available for such occupancy and have been so held continuously
since the date an Eligible Tenant vacated such unit; as indicated:
Occupied
Vacant
Number of Eligible Tenants who commenced occupancy of the units during the preceding year:
Attached is a separate sheet (the "Occupancy Summary") listing, among other items, the
following information for each unit: the number of each unit, the occupants of each unit, and the
rental paid for each unit. The information contained on the Occupancy Summary is true and
accurate.
IN 111111111 5561
a, �a0 30 of08 206R
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The undersigned hereby certifies that (1) a review of the activities of the Participant during such
quarter and of the Participant's performance under the AHA and the documents referred to
therein has been made under the supervision of the undersigned, and (2) to the best knowledge of
the undersigned, based on the review described in clause (1) hereof, the Participant is not in
default under any of the terms and provisions of the above documents [or on a separate sheet
describe the nature of any detail and set forth the measures being taken to remedy such defaults].
"PARTICIPANT"
By:
Its:
By:
11111111111111111111111111111111111111111111111111111 e1�a0300f OGA 2
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EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
REMAINDER PARCEL, OF TRACT NO. 28601-1, AS SHOWN BY MAP ON FILE IN
BOOK 278, PAGES 86 THROUGH 90 OF MAPS, RECORDS OF RIVERSIDE COUNTY,
CALIFORNIA.
IIIIII NIIIII IIII IIIIII IIII IIIIIII IIIII III IIIII IN IIII 91 2603003 5561
f08200R
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